PETALING JAYA: Malaysia’s procurement system needs to address flaws in the current mechanism and make disclosures of direct negotiations, says the Institute for Democracy and Economic Affairs (Ideas).
"The mechanism only discloses the winning bidder and costs, which is insufficient for effective accountability," said its Public Finance Unit manager, Alissa Rode, in a Thursday (Sept 21) statement.
Her comments followed the Sept 14 announcement of institutional reforms by the Special Cabinet Committee on National Governance.
“There should also be disclosure throughout the contract's life, such as when price changes or modifications occur.
“These disclosures would provide information for better checks and balances,” she said.
In the event that direct or competitive negotiation is necessary, it should be disclosed and justified publicly before awarding a contract, she added.
She urged for sufficient oversight of sensitive defence contracts despite the need for secrecy, which can be achieved through mandatory reporting to a Parliamentary Special Select Committee.
In addition, Ideas also welcomed the government's commitment to review the existing legal framework of statutory bodies' subsidiaries to align with principles of good governance and recommends the government to consider best practices derived from the OECD Guidelines on Corporate Governance of State-Owned Enterprises.
“Two aspects need to be adhered to: observing high standards of transparency and conducting an appointment process that is transparent and professional.
“Statutory bodies should be subject to a higher standard of public disclosure, compliance and oversight,” she added.
Citing data from Pantau Kuasa, she pointed out 238 political appointments across 72 federal statutory bodies under the previous administration, not including political appointments in government-linked companies (GLCs).
She said the proposed reforms would only be effective if the right to information is guaranteed.
The reforms are needed to reduce potential abuses and conflicts of interest, as well as risks of wastage and inefficient operations in the companies, all of which serve the public interest, she added.
“This is why the Special Cabinet Committee's commitment to enacting a Freedom of Information (FOI) Act is crucial.
"Only with such an Act can citizens meaningfully scrutinise government actions, including how our money is spent.
“Lastly, the commitment to amend the Official Secrets Act (OSA) is crucial, not only for enabling better access to information but for the health of our democracy (in general).
“With FOI in place and a less restrictive OSA, I am hopeful that open, transparent governance will become the norm rather than an exception in Malaysia,” Alissa said.
Ideas also called for a public consultation on the actual wording of these reform Bills before they are tabled.
